If you've been watching Brazil, the de facto new center of the energy universe since its big Tupi field was discovered two years ago, you may want to hone in even more closely on the goings on in the country.
On Monday, after weeks of speculation about potential new rules that would put the state oil company, Petrobras
The pre-salt area extends about 500 miles along the Brazilian coast, including Espirito Santo and Santa Catarina states. Its oil is trapped beneath a thick layer of salt as deep as 8,000 meters beneath the water's surface. The area has been under increasing activity since the Tupi field was first discovered in 2007.
Since that time, several other discoveries have confirmed the existence of large amounts of oil in the pre-salt, much of which is comprised of the Santos basin. The two most prominent deepwater drillers, Transocean
But with the government becoming more restrictive and the new rules looming, Europe's largest oil company, Royal Dutch Shell
Indeed there are no guarantees that Lula's proposals will become law. They may, in fact, be challenged in the country's congress by a trio of opposition parties. And they come about at a time when the Senate's President is facing corruption charges that have been leveled by other senators.
Although Petrobras' share price has slid the past several trading days, it remains the state oil company in an area with vast amounts of petroleum. So while there may be temporary consternation in the nation, it's difficult to see how Petrobras can be a loser in the long term.
Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He does welcome your comments. Petroleo Brasileiro is a Motley Fool Income Investor selection. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.